It is a great time to be a professional futurist working in the automobile sector!! We see clearly how quickly change can happen- and how the public’s most deeply held assumptions about the future can be revised in only a few years.

The recent string of announcements coming from Detroit, Japan, China and the rest of the automotive sector suggest big changes ahead. Yes, it will take years to unfold, but the shift toward the electrification of the world’s transportation sector has begun.

Between 2010-12 consumers can expect to see first generation all-electric vehicles from nearly every major automobile manufacturer. The monopoly era of liquid fuels and the combustion engine has started its descent. By 2025 the industry might be in a position abandon this 19th century propulsion platform and begin a new era of electric propulsion with the help of batteries, hydrogen fuel cells and capacitors.

What happened?
Accelerating change happened. We are now adjusting our outlook to reflect a convergence of new market conditions, shifts in the regulatory environment and new consumer expectations for positive change. And of course, materials science technology changed.

Last week General Motors released production model details for its all-electric extended range Volt. GM now seems to believe that the internal combustion engine might best be used to power the battery not the vehicle itself..

Who else has made statements about planned electric models for 2010-12? How about Toyota, Renault, BYD (China), Tata (India) and Mitsubishi?! And what about start ups like Tesla, Fisker, Zap, and Morgan.

And that doesn’t include all the aspiring vehicle makers in China and India who might see profits ahead around leap frogging into electric power train systems. Or visionaries in Ohio and Michigan who realize that electric vehicles could be a very good thing for revitalizing the ‘Rust Belt’ around high value added manufacturing. Now we have a green light for politicians to speak confidently about electric cars. The stigma is gone.

Yes, things will take time to change. But the public tends to focus on the new growth rather than the old technologies that fade away slowly. Adoption rates for electric vehicles might surprise us!

Want to think about a tough pill to swallow? Electric cars are not likely to make countries more energy independent. The US and Europe are likely to trade ‘foreign’ oil, for ‘foreign’ energy storage systems! And this might not be a bad thing. If we expect to transform the largest industries in the world (energy and transportation) it will have to be a global effort.

Key to Electric Vehicles – Asia & Energy Storage
If we look closely at recent announcements around electric vehicles, the future is looking very globally integrated and interdependent. Even as the US tries to grow its manufacturing base around ‘cleantech’ industries, Korea, China, and India are making strategic investments in the future of energy storage systems (batteries, fuel cells and capacitors) to power electric vehicles.

In the last few weeks Warren Buffet placed a $233 million bet on China’s BYD, a US firm purchased a Koren battery maker, India’s Tata announced plans to sell electric cars in Europe, and GM picked the unit of Korea’s LG Chem to supply batteries of its Volt electric car.

Today, Green Car Congress picked up a Reuters report that Korea’s number one refiner SK Energy is in talks with major automakers such as Daimler and Ford on the joint development of next-generation batteries used in electric cars. SK Energy is looking to leverage ‘separator’ components for lithium ion batteries that prevent overheating. SK joins the crowd of Exxon, Chevron and Toshiba who are getting involved in battery materials.

Selling a new message: The Eco benefits of being Global
In the months and year ahead leaders in the US and Europe might have to change their simplistic and nationalistic message of independence to reflect the complexities of the energy industry and the future. It will likely be globally integrated.

If the US and Europe expect to kill the combustion engine, and end the monopoly era of liquid fuels, they will need Asia and the rest of the world to join in the effort. This new message might better reflect the brutal facts of the global economy and fate of the planet – we’re all in it together whether we are talking energy finance, energy resources, energy emissions, energy software or energy storage.

The solar industry is growing globally. The wind industry is growing globally. Why not electric vehicles? Could that be an easier pill to swallow and a better image of the future?

BMW will unveil its electric version of the Mini Cooper at the Los Angeles Auto Show on November 19 and 20, 2008. The company is claiming to be the world’s first manufacturer of premium automobiles to deploy a fleet of some 500 all-electric vehicles for private use in daily traffic. The MINI E will be powered by a 150 kW (204 hp) electric motor fed by a high-performance rechargeable lithium-ion battery, transferring its power to the front wheels without a sound. The MINI E is expected to accelerate to 100 km/h (62 mph) in 8.5 seconds. With its top speed electronically limited to 152 km/h (95 mph).

The battery technology will have a range of more than 240 kilometers, or 150 miles. Sales are expected to focus on private and corporate customers in pilot projects in California, New York and New Jersey.

Electric Motors vs Combustion EngineBMW’s announcement follows along with recent industry plans to electrify the world’s auto fleet. We might interpret these announcements as a response to the ‘oil problem’ or ‘climate change’ regulations. But what if the real reason is based on a desire to abandon the design and manufacturing complexities of the combustion engine? Forward looking industry insiders hope that a new low cost manufacturing platform could emerge around the combination of wheel based electric motors, drive by wire systems, and the tight integration of batteries, hydrogen fuel cells and capacitors.

We believe there is something happening in the auto industry that goes beyond oil and climate change The end game might be to change how we build and sell cars, not how we fuel them. If the real problem really is the combustion engine, and not oil, BMW’s plans might really be an effort to accelerate its shift to a new vehicle platform.

Add Warren Buffet’s latest investment to the list of major news indicators that fuel forecasts saying that the dominant days of the combustion engine are coming to an end. (Read GM to Combustion Engine-R.I.P.)

Through his Berkshire controlled MidAmerican Energy, The Oracle of Omaha has invested $230 million for a 10% stake in China’s car and battery maker BYD. BYD could soon become a global leader in electric propulsion auto systems and a mainstream vehicle brand.

Following the growth in electric propulsion systems
While there are reports
that BYD plans to ‘roll out fully electric cars before the end of next year’ and sell within the US, BYD does not have to displace GM or Toyota to return on Buffet’s investment.

Think of Shenzhen-based BYD as an advanced electric propulsion and electron storage device maker for Li-ion, Nickel batteries, capacitors and fuel cells. Rather than fight for market share against Toyota and GM in vehicle sales, BYD’s growth could be as an energy systems manufacturer.

Why MidAmerican might love BYD’s batteries more than its cars
Buffet’s other (or main) intention could be to expand the role of the electrical grid in fueling automobiles. He might also see promise in BYD’s battery systems for utility scale storage to improve the electrical grid.

Electric cars are coming in 2010-12 but we need to innovate energy storage solutions.

Recharging electric vehicles is not as simple as ‘plugging in at night.’ Our aging electrical grid and home wall sockets are not a suitable foundation for mainstream growth in battery vehicles- and automakers understand this.

Watch in the weeks and months ahead as electrical grid startups and electron storage companies like Shai Agassi’s Better Place gain more media attention and venture backing.

But what other innovative business models might emerge around electron-based transportation fleets? How about ‘swapping’ boxes?

CleanTech Group is reporting that Hyundai plans to sell commercial fuel cell electric cars in 2012 (not shown). The South Korean company is taking a bold step in anticipation that the future of electric vehicles will require tight integration of batteries, fuel cells and capacitors.

Electric Vehicle Roadmap includes Fuel cells
The key to commercializing electric vehicles is to develop advanced energy storage devices. Batteries appear to be good enough, but not a great long term platform for automobiles. We can also store electricity in the form of chemical bonds of hydrogen and as a physical charge inside capacitors. (Imagine lightning in a box!)

Electric vehicles are not iPods- and require very different energy storage and delivery systems to match the performance of combustion engines. The future of electric vehicles is likely to evolve around the tight integration of all three major energy storage systems.

Hyundai understands this long term focus on integrating battery and fuel cells and might be trying to position itself in this new era of electric vehicles.

Hyundai’s decision stands out from the string of recent announcements from GM, Nissan, Rennault, China’s BYD, India’s Tata who all plan to sell commercial all battery electric vehicles by 2011. GM, Honda and now Hyundai have all been clear that they are not likely to bet the farm on an all battery energy storage system given the cost and performance potential of fuel cells.

Founder Elon Musk (of Paypal fortune; SpaceX rocket fame) is now leading the company replacing CEO Ze’ev Drori. In the company’s blog Musk reports the anticipated closing of its Rochester Hills office near Detroit, and new growth focus on its Roadster sports car and sales of its powertrain.

Only a month ago the company brought joy to the California Cleantech community by announcing plans to build a $250 million facility to manufacture a zero-emission lithium ion powered sedan in the heart of Silicon Valley. Now this Model S version of Tesla’s electric car might be delayed until 2011 depending on a number of conditions.

The change in leadership is related more to ‘extraordinary times’ rather than the core vision of Tesla’s business plan. The electric vehicle market is just getting started and Tesla could certainly emerge as a specialty vehicle maker or powertrain designer.

In recent days, we have highlighted the steady stream of media commitments of production vehicles (2009-2011) from automakers GM, Nissan, Tata Motors-, BYD, and Chevrolet

Electric infrastructure investments are also not likely to slow down unless automakers divert from recent plans. In recent weeks electric vehicle infrastructure startups like Better Project have had their business efforts validated by Warren Buffet’s $233 million investment in Chinese battery maker BYD, and $500 million plan to extend France’s grid to vehicles by utility giant EDF

The future of electric vehicles based on a combination of batteries, hydrogen fuel cells and capacitors should not be completely derailed by an economic slowdown. So despite the bumps ahead, we expected Tesla to stay on its course.